December 31, 2014
Kansas tax revenue fell $15.1 million short of expectations in December, ending a year that saw an up-and-down ride for revenue. But in a double blow, the shortfall came despite recently lowered expectations.
Corporate income tax receipts were $19.8 million below expectations, though individual income tax receipts exceeded expectations by $8.2 million.
“We’ve always recognized that corporate income taxes are volatile and hard to predict; this month is evidence of that,” Revenue Secretary Nick Jordan said.
The Kansas Department of Revenue also said in a statement that corporate income tax receipts remain $22 million ahead in the first six months of fiscal year 2015 when compared with the first six months of fiscal year 2014.
Halfway through the fiscal year, which runs from July through June, revenue receipts are $12 million below estimates.
The negative December report followed a positive report in November. In that month, revenue beat estimates by $3.1 million. The positive November revenue report came after Kansas fell $23 million short of estimates in October.
Kansas has at times struggled against revenue estimates this year. The state came in $334 million below projections in April, May and June, but collections rose in July and August. Collections once again fell in September, coming in $21 million short.
In November, Kansas revenue analysts issued a consensus revenue estimate that forecast lower tax receipts than initially predicted for the current fiscal year, which runs through the end of June. According to the new estimates, Kansas will fall $279 million short of previous projections.
That new, lower estimate forced Republican Gov. Sam Brownback to make millions in midyear budget cuts. He is also asking the Legislature, which will convene in January, to authorize millions more in fund transfers to make up for the shortfall in the budget.
Brownback, with the help of a Republican-led Legislature, slashed taxes in 2012. In the wake of the tax cuts, revenue has fallen.
Annie McKay, director of the Kansas Center for Economic Growth, which has been critical of the tax cuts, agreed with Jordan that corporate tax receipts can be volatile. But she said the better-than-expected income tax receipts in December shouldn’t be taken as a sign that Brownback’s tax policy is working because income tax receipts have surged in December in the past.
“Kansas’ inability to meet revenue estimates that were just lowered last month further jeopardizes the future of our great state. With support for services that are critical to economic growth — like our neighborhood schools, access to health care, and good roads in jeopardy — the outlook for the short term isn’t getting any sunnier with these new monthly figures,” McKay said.
Read more from the Topeka Capital Journal here.